State Residency and Taxes???

[Orchidflower]

As A854321 posted, the State's that supposedly give retirees the best deal makes it look like Delaware was a winner. THEN I found out I would be taxed on interest and dividends at the 5.95% rate and capital gains, also. Boo hiss! I think that can be beat.

[teejayevans]

Quote:

Originally Posted by A854321 Which states give retirees the best deal? - MSN Money This might be a more realistic scenario to follow.

Or not....for example, Raleigh, NC
The property taxes should have been 2078, PLUS
they ignored personal property taxes for NC, so I guess they
assume you don't have a car? Add $200 for your late model
honda...oh, you have two cars, and a boat....cha-ching!

TJ

[haha]

Quote:

Originally Posted by audreyh1 How do RVer's do it? You are required to have a permanent "physical address", but this does not require that you be physically present at that address for any given amount of time in some states. Audrey

What is a "permanent physical address in this case"? Does this mean that even if you are moving around in a $250,000 motorhome that you have to rent or buy an inhabitable place in your home state?

How about a camping club membership taken out in your home state?

Ha

[A854321]

Doesn't your driver's license address define your home address for legal purposes?

[Martha]

Quote:

Originally Posted by haha What is a "permanent physical address in this case"? Does this mean that even if you are moving around in a $250,000 motorhome that you have to rent or buy an inhabitable place in your home state? How about a camping club membership taken out in your home state? Ha

You just need a street address. Many mail forwarding companies will provide such an address for you. That is fine--at least with South Dakota.

The big problem isn't so much establishing residency in a new state, it is terminating residency in your old state and not accidentally becoming a resident of a state by spending too much time in that state. So, to terminate make sure you get a address, even if through a mail forwarding service in the new state, you register to vote in the new state, you register your vehicles in the new state, you get your driver's license in the new state, and you don't take advantage of state resident benefits such as resident fishing licenses in your old state. And then don't spend 6 months or more in your old state or in any state that you don't want to be a resident of.

[Buckeye]

Even if you are not a resident of a state, don't they still tax you on the percentage of income earned while you were living in the state? I don't think OH waits for you to be a resident to tax you. For example, if you live in the state for 5 months out of the year, they compute state income tax on 5/12 of your annual income.

[roadkill]

Quote:

Originally Posted by Buckeye Even if you are not a resident of a state, don't they still tax you on the percentage of income earned while you were living in the state? I don't think OH waits for you to be a resident to tax you. For example, if you live in the state for 5 months out of the year, they compute state income tax on 5/12 of your annual income.

Generally, the state in which the income was earned taxes you. If you are not a resident of the state in which you earn the income, you would receive consideration for taxes paid in another state by your state of residence. However, as has been discussed, each state has it's own rules as to who is a resident for tax purposes. Therefore, depending on your travel patterns and length of time spent in various states, you could technically be a resident for tax purposes in more than one state.

[kramer]

I may establish Texas residency if I leave to teach English overseas next year (I currently am a California resident). California has even stricter residency rules for expats than the federal government.

I read up on the RV forums to see how state residency was established "in practice" as opposed to just what is written down. One thing that I could not figure out is why more people did not choose Nevada -- almost everyone went for Texas and South Dakota. I figured there must be some subtle reason that Nevada was not also a state resident candidate for most (and I don't think it had to do with registration fees) as it is geographically so close to the many RV'ers from California. But there are subtle issues that some places might require like: having to appear in person for DL renewal, not being able to legally delay jury duty, having to have a true physical address that is habitable, etc. So I was more comfortable following the lead of others and going with Texas (there were other reasons, too). When I recently established my "permanent" SkypeIn number, I used a Texas area code.

Re: tax costs among the states
Realize that often indirect taxes are your greatest cost. For instance, zoning and environmental rules make housing far more expensive in California than it would otherwise be if the market operated closer to natural supply and demand -- those indirect taxes are higher than the direct taxes for most who live in California. Of course, we usually take these things into consideration when comparing the cost of housing across regions, etc.

Kramer

[Orchidflower]

Have you checked into South Dakota? One of the people on this board--on another topic--said they went with S. Dakota residency (this person was an RVer) because in S. Dakota you only have to get new licensing every 5 years.
Having lived for a long time in Texas, I know it was every year I had to have my car inspected. Big difference.
So, why not South Dakota? That is the State I would choose, frankly, over Texas. Any reason you did not pick South Dakota? Maybe you could help all of us here if you have a valid reason.

[audreyh1]

Some people don't pick South Dakota because health insurance is expensive.

Also, you have to appear in person to renew your driver's license.

The annual inspections in TX can be a pain, but you only have to take care of that as soon as you cross the border into TX. If you can prove you have been out of state when it was expired, you're OK.

Audrey

[teejayevans]

So lets assume I live in state X, without supplying a forwarding address,
I move to state Y, so you have no real estate in state X. Even if state X
wants to still claim you as a resident, if they don't have a mailing address,
they cannot even send you a tax bill.

BTW, I move (but within the state) without leaving a forwarding address;
the reaction of the post office worker was priceless, "But you can't do
that, what if we get something that's important" to which I replied "Keep it"
My junk mail dropped to almost nothing, with exception generic mail that
isn't address to a specific person.
I thought I changed everything over, but had forgotten about a
changing my address on some land I owned, they couldn't find me
so I didn't get the bill , not sure what they would've done if I
hadn't called them.
TJ

[RunningBum]

Eventually they'd have put a tax lien on the property and repossessed it. Maybe they'd have made some effort to find you, maybe not. It's not the state's responsibility to find you to send you a bill in your hide-and-seek game. But when you owe enough money, they will try harder to find you (or your property)., and you will lose the game.

[teejayevans]

Quote:

Originally Posted by RunningBum Eventually they'd have put a tax lien on the property and repossessed it. Maybe they'd have made some effort to find you, maybe not. It's not the state's responsibility to find you to send you a bill in your hide-and-seek game. But when you owe enough money, they will try harder to find you (or your property)., and you will lose the game.

True, but that was my real life case, in the example I cited:
"So lets assume I live in state X, without supplying a forwarding address,
I move to state Y, so you have no real estate in state X. Even if state X
wants to still claim you as a resident, if they don't have a mailing address,
they cannot even send you a tax bill."

So what are they going to do, call up state y and tell them, look, the guy
in living your state is really ours, pls send any money you have collected
and forward his address so we can get the balance of what he owes us.
I would think state y will tell state x to go pound sand.
TJ

[audreyh1]

Back on the state taxes thing:

I often notice that articles comparing taxes across states assume you have a large piece of real property and thus pay considerable property taxes. Under those conditions, TX doesn't compare as well. But property taxes are a yet another good reason NOT to own a large piece of real property.

And, if you are an RVer or live on a boat, or whatever, property taxes do not come into the picture at all. As far as I am concerned, income taxes is all that matters!

BTW - Florida is also popular as a residence state and has a good mail forwarding service. They have no state income tax and dropped their silly "asset tax" a while ago.

Audrey

[teejayevans]

Quote:

Originally Posted by audreyh1 And, if you are an RVer or live on a boat, or whatever, property taxes do not come into the picture at all. As far as I am concerned, income taxes is all that matters!

But personal property taxes do, some states have them like NC, I thought
FL did as well, or did that go with the asset tax?
TJ

[Orchidflower]

Let me re-ask Kramer's question: why not register in Nevada?